Officials at the European Central Bank and Bank of Japan are among those intending to keep stimulating their economies aggressively. This is likely to steepen the yield curve, but we don’t see it is as a pre-cursor to an imminent policy rate hike. We are sticking to our view that the RBI will keep policy rates low for longer to revive growth on a more durable basis. With President Alberto Fernandez’s government facing midterm elections in November, the central bank is printing money to finance public spending at the fastest pace so far this year. At the same time, it has left the policy rate virtually unchanged at 38% since March 2020, meaning deeply negative real rates for investors.

Source: Economic Times October 09, 2021 23:26 UTC